March 30 (Reuters) – Wells Fargo & Co’s possible involvement in the Archegos Capital fallout comes as a surprise and could risk increased regulatory scrutiny or delay its asset cap being lifted, J.P. Morgan research analysts said on Tuesday.
Global banks may lose more than $6 billion from the downfall of Archegos Capital, sources familiar with trades involving the U.S. investment firm said on Monday, and regulators and investors fear the episode could reverberate more widely.
Wells Fargo has been in regulators’ penalty box since 2016 when details of a sales scandal first emerged, leading to the departure of two chief executives, billions of dollars in litigation and remedial costs and the U.S. Federal Reserve capping its balance sheet at $1.95 trillion. (Reporting by Tanvi Mehta in Bengaluru; Editing by Sriraj Kalluvila)
